Businesses have a moral obligation to act in a socially responsible manner because

Social responsibility is an ethical theory in which individuals are accountable for fulfilling their civic duty, and the actions of an individual must benefit the whole of society. In this way, there must be a balance between economic growth and the welfare of society and the environment. If this equilibrium is maintained, then social responsibility is accomplished.

What it Means to be Socially Responsible and Ethical?

The theory of social responsibility is built on a system of ethics, in which decisions and actions must be ethically validated before proceeding. If the action or decision causes harm to society or the environment, then it would be considered to be socially irresponsible.

Moral values that are inherent in society create a distinction between right and wrong. In this way, social fairness is believed (by most) to be in the “right”, but more frequently than not this “fairness” is absent. Every individual has a responsibility to act in manner that is beneficial to society and not solely to the individual.

Find out how Social Justice and Environmental Justice are intrinsically interconnected.

When Do Social Responsibility and Ethics Apply?

The theory of social responsibility and ethics applies in both individual and group capacities. It should be incorporated into daily actions/decisions, particularly ones that will have an effect on other persons and/or the environment. In the larger, group capacity, a code of social responsibility and ethics is applied within said group as well as during interactions with another group or an individual.

Businesses have developed a system of social responsibility that is tailored to their company environment. If social responsibility is maintained within a company, then the employees and the environment are held equal to the company’s economics. Maintaining social responsibility within a company ensures the integrity of society and the environment are protected.

Often, the ethical implications of a decision/action are overlooked for personal gain and the benefits are usually material. This frequently manifests itself in companies that attempt to cheat environmental regulations. When this happens, government interference is necessary.

Unfortunately, social responsibility and ethics are often not practiced by American companies outside of U.S. borders, which makes regulation difficult.

The Pachamama Alliance

Pachamama Alliance is an organization that seeks to instill social responsibility in the industrialized or “modern” world. Our partnership with the indigenous Ecuadorian tribe, the Achuar, began when they recognized the imminent threat of oil drilling in their home. This tribe, hidden deep in the Amazon forest, has inhabited this area for thousands of years and is at risk of total destruction.

The goal of The Pachamama Alliance is to restore a sense of active decision-making to the people and companies of the modern world. Currently, the Achuar and their home are in danger because of our addiction to crude oil. This addiction is the result of a faulty system of beliefs that disregards the environment, its inhabitants, and the consequences of our actions. A change in this universal mentality is imperative if the Achuar are to survive this threat; in order to do so, pandemic social responsibility is essential.

Independent Owner/Entrepreneur of Sylvan Learning Center of Temecula. Ensuring the educational success in Temecula, California 

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Now more than ever, there is a growing importance for companies to ramp up their focus on social responsibility. "Social responsibility," in simple terms, means a business’s obligation to pursue achievable and good long-term goals for its people and the world at large.

I've observed a number of successful companies today that use social responsibility as a way to give back to society and thank customers for their loyalty. This can come in the form of projects, movements or empowerment of individuals. Whatever form these corporate ventures take, they are definitely a win for both the company and the community alike. I've also seen that some companies are taking the lead and venturing into humanitarian projects ranging from the construction of roads to the alleviation of poverty.

Because corporate social responsibility is not compulsory, many companies might not feel the need to engage in it. However, there are several reasons I believe it is important for companies to prioritize social responsibility.

CSR can help you attract and retain employees.

One of the major reasons people apply to various companies is because of their CSR strategy. From my perspective, a CSR strategy shows a company is compassionate and treats all people, including employees, well. And a business that is committed to improving the world is likely to attract more talent. This shows how important employees take social responsibility. CSR efforts also help foster a more productive and positive work environment for employees. It promotes volunteering and positive efforts from employees.

CSR can improve customers' perception of your brand.

The competition in the business world of today is stiff, and it can be quite challenging for a company to set itself apart in the eyes of customers. However, businesses that take social responsibility seriously can win consumers, as well as develop a platform to market and earn their audience's attention.

Simply put, social responsibility can help people see your company as a positive force in society. The projects you and your team take on can help raise awareness for important causes and keep your business top of mind.

CSR is also important when it comes to branding. To have a successful brand and retain customers, businesses must create trust with their target audience, and I believe having a CSR strategy can help build a good reputation — and, in turn, earn trust and loyalty — among clients.

Consumer loyalty goes a long way in helping a business stay afloat. Part of what makes a functioning business is your customers; without them, your business simply would not exist. For their loyalty, consumers expect brands and businesses to not be all about making a profit, but to give back to society.

According to a 2015 survey by Nielsen (registration required), more than 50% of consumers are willing to pay more for a product or service if the business prioritizes sustainability. This tells me that consumers will opt for and stick with companies that aren't just profit-oriented.

CSR shows a sign of accountability to investors.

Businesses that are socially responsible can also appear more attractive to investors. In my experience, investors in a business have one common goal: to have greater returns than invested funds. I view businesses that are able to manage finances while still helping their communities as accountable and transparent in their dealings. According to a 2016 report by Aflac, investments in CSR are not typically viewed by investors as a waste of money, but rather an "indicator of a corporate culture less likely to produce expensive missteps like financial fraud." The study said 61% of investors consider CSR a sign of "ethical corporate behavior, which reduces investment risk."

CSR saves money.

You might not expect a CSR strategy to improve your bottom line because it typically requires investment in projects. However, as mentioned above, many customers are willing to pay more for products from a socially responsible brand, and CSR can help attract and retain employees. Given that turnover can cost companies thousands of dollars, this is worth noting.

CSR can enable you to better engage with customers.

From my perspective, CSR can help your business better engage with customers. Many forms of CSR involve businesses interacting directly with members of society, who may also be customers or potential customers. You can get direct feedback on what you are doing right and what your company needs to improve on. Word-of-mouth is still an effective form of advertising, and customers who have been part of the social responsibility created by a company are able to tell other potential customers about the business. 

In conclusion, businesses can no longer operate with the sole aim of making profits at the expense of the environment, society, economy, consumers and employees. Companies need to consider how they can give back to society, and this can help you attract customers and keep your best employees. Customer satisfaction and employee retention are the keys to any successful business, after all.

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